Simple way for motivation & skill development

Monday, July 29, 2019

How To Get Rich: Rich Dad Poor Dad For Teens Chapter Summary

How To Get Rich: Rich Dad Poor Dad For Teens Chapter Summary

How To Get Rich: Rich Dad Poor Dad For Teens Chapter Summary
How To Get Rich: Rich Dad Poor Dad For Teens Chapter Summary

Everyone is born their own kind of genius. We each have various degrees of intelligence that enable us to have certain strengths and weaknesses; whether or not we decide to figure out a way to use our talents to become rich is almost entirely up to us. According to the author Howard Gardner, who wrote Frames of Mind, says there is not just one type of intelligence, but eight: verbal-linguistic intelligence (has to do with reading, writing, and language; being word smart), numerical intelligence (the ability to easily grasp data and numbers; usually calm and rational thinkers), spatial intelligence (used to see patterns, designs, and space), musical intelligence (especially tuned in to sounds, rhythm, and rhymes), physical intelligence (awareness of how to use your body well; dancers, athletes, and martial artists), interpersonal intelligence (the way one gets along with other people; people smart), intrapersonal intelligence (self-aware and emotional intelligence; being self-smart), and natural intelligence (a person's sensitivity to the world around him or her). The author of Rich Dad Poor Dad for Teens, Robert T. Kiyosaki, added a ninth intelligence: vision. Vision determines who will be a leader and who will be a follower. When I took the self-check to see which intelligences were dominant for me, I found that I am strongest in verbal-linguistic intelligence, musical intelligence, and physical intelligence. This show that I have greater success in learning by doing. By being aware of my learning style, I can better learn in school and, further along, life. To balance out my weaker points, the author suggested that I talk about money, read about it, write about it, take my allowance (if I get one) seriously, do my own personal audit, and decide to become responsible for my future. Building confidence is also a necessary first-step to becoming rich. Robert T. Kiyosaki suggests that one listens to how one interacts with others; he also claims that my thought-life has everything to do with whether or not I can get rich. “The best way to get what you want is to believe you can get it.”
Life has rules. Rules that can be followed just as well as broken, twisted, or changed completely. The same goes for the rules of becoming rich. Getting a job and earning a salary is not the only way to get rich. In fact, the chances of getting rich off of salary alone are next to impossible. That's where things such as investments and stocks and bonds come in. I believe that, while the salary alone might not make me rich, it can contribute to the beginning of becoming rich. When the author went to school, he noticed the different attitudes of the rich kids. He said that,”They learned to have a confident attitude about money.” As discussed in the first chapter, thinking the right thoughts is extremely important for becoming or, in the rich kid's case, staying rich. The author's dads each had their own way of viewing money. Their views affected the amount of money they each had at their disposal. Poor dad says,” Study hard so you can find a good company to work for. The reason I'm not rich is because I have you kids. When it comes to money, don't take risks. Work for benefits. Save. Write a good resume to find a good job.” Rich dad's views, however, are completely opposite. “Study hard so you can find a good company to buy. The reason I must be rich is because I have you kids. Learn to manage risks. Be totally self-reliant financially. Invest. Write a strong business and financial plan to create a good company.” What rich dad is trying to tell the me through the memories and experiences of the author is that I should be my own boss and therefore independent financially, have a reason to get rich, not excuses for why I am not, and learn what can be risked.
Don't learn to work; work to learn. People who haven't read the previous chapters of Rich Dad Poor Dad for Teens won't understand. Isn't it common knowledge that one must learn to work so that one can have a good career? Actually, if one thinks about, it is better to work to learn. Some things are better learned through experience, such as standing up to my boss someday. At the end of this chapter, I came to the conclusion that I shouldn't let money be the sole reason for working. Cue the gasp among the ignorant folk. Now think about the logic. If when I was working I thought about money money money, then I would think about how much I was making in comparison to how hard I was working. That is how money controls people. If I become money's boss and not need money, then I'll be able to make more money. Money is, after an illusion. The author used the example of the donkey being tempted by the carrot on the end of the line. The farmer holding the carrot would always keep moving the carrot farther away, and the donkey would always try to catch the carrot. The donkey is chasing an illusion. Basically, if I let money control me, I'm letting an illusion control me; that makes me all the more silly for doing so, don't you agree?
One of the best dreams that can easily become reality is that my money can work for me. But first, I need to remember that I work to learn, not to earn. Rich dad told the author that the sooner he forgets that he needs a paycheck, the easier life will be as an adult. “Keep using your brain, work for free, and soon your mind will show you ways of making money far beyond what I could ever pay you. You will see things that other people never see. Opportunities are right in front of their noses...The moment you see one opportunity, you will start seeing opportunities for the rest of your life.” After the author learned to stand up to his boss, Rich dad said now he had to work for free. Rich dad occasionally tried to offer $5, but the author and his friend, remembering that money is an illusion, wouldn't take the bait. Just like Rich dad said, the author and his friend saw an opportunity to make money by opening a comic book library. Even when they weren't there to run it, it made money for them. I could do something similar by maybe publishing a story or book and I could profit off the sales.
There are three general ways to earn money: earned income, passive income, and portfolio income. Earned income is money you get from working a job. Passive income is money earned even when you're not physically doing any work; some example sources of passive income include real estate and royalties. Portfolio income is money invested in paper assets such as stocks, bonds, and mutual funds; it works on the same principle as passive income. One of the major keys to becoming rich is being able to translate earned income into passive and portfolio income. Rich dad told the author that the best kind of income was the kind that worked hardest for us and cost us the least. In other words, portfolio and passive income were best. It is important to know the difference between an asset and a liability. An asset puts money in your pocket and should generate income on a regular basis. Anything that I own that produces passive or portfolio income is an asset. To get rich, I must acquire an asset. Liabilities, on the contrary, take money out of my pocket. Debts, taxes, and pretty much everything I own are liabilities. While some would consider buying something and then reselling it to be an asset, most of the time it actually isn't. For example, I bought four paperback books late last year. From the moment I opened the box, and maybe even before that, the value of those books has been steadily decreasing, especially the more I used the books. Now, I can't sell the books for the same price or even a little more than that. With great assets, come great amounts of portfolio or passive income.
“If you want to be rich, you've got to read and understand numbers.” That really is a key concept, seeing that a lot hangs on my understanding of my financial plan to become rich. Financial statements show the relationship between what you have and what you owe, allowing a clearer understanding of your money and allows a lot of information to be taken in at a glance. A financial statement is made up of two parts: an income statement and a balance sheet. Income statements basically show what money is coming in and what money is going out and gives you an idea at a glance of what money you might have available. A balance sheet shows the relationship between assets and liabilities. The pattern of money coming in and going out is called cash flow. Creating my own financial statement could really help me to understand how to better manage my money, find new ways of saving and making money, and better understand the differences between assets and liabilities.
While most teens would consider playing board games to be childish, the author of Rich Dad Poor Dad for Teens actually describes them as,”sophisticated.” Rich dad said,”Play games to learn.” Apparently, playing some of the games the author developed will give me the experience of years of investing in just a couple of hours. Games such as CASHFLOW 101, CASHFLOW 202, and Monopoly are designed to show me how money makes money, how investments work, which choices I should make financially, what opportunities are right in front of me, etc. While the games the author designed were for different ages and formatting, they all have the same basic lesson to teach me: how to get out of the Rat Race and into the Fast Track. The rat race is the endless cycle of working hard to earn more money and spending it on liabilities and bills. Roughly 90% of the population of America is caught up in the rat race. For unknown reasons I don't understand, people want to buy the latest things that go out of fashion within a week. These people are wasting money on liabilities that are just pulls them deeper into the rat race and deeper into debt. There are two kinds of debt: bad debt and good debt. Bad debt is where I have to pay the money back. Good debt is when my investments pay the money back for me. The ultimate goal of investing is to get my income from investments to be greater than my expenses; then I can get rich. The fast track is when my assets are earning money for me as passive income. Obviously, the way to get rich is to get on the fast track.
There are many job opportunities for teenagers throughout the country, from dog-walking and babysitting to helping out in a clothing store or pet shop. Of course, my age decides where and how long I can work. One of the first steps for me as a young teen to start working is to make sure my parents are okay with it. Once they are, they can help me look for a good job that fits with my needs. When looking for a job, I need to remember one of Rich Dad's key lessons: work to learn, not to earn. I should look for a job based on what I can learn doing the job and the opportunities that come with it, not what I can earn. I need to remember to avoid jobs in which I raise money for someone else; while I'm working to learn, I still want to be the money's boss, and I can't do that if the money I'm earning isn't for me. One important thing to remember when looking for a job is the taxes. Working, whether I'm working to learn or not, comes with taxes. Let's say I want to start my own clothing store. I can learn how it works by working there first. If I want to start a business, but can't get it off of its feet, selling is an important skill I can work on in the mean time. “The lessons you learn in one industry can often be applied to other industries.” Rich dad once said,” You can have anything you want as long as you're willing to exchange something of value for what you want.” Basically, the more I give, the more I get in return. That is a very important lesson that is applied not only to getting rich financially, but getting rich in other ways, such as valuable experience. In conclusion, it is important to remember that my paycheck, no matter how measly, will get my cash flow started if I use it correctly.
“What I learned from Rich Dad is that no matter what age you are, you should have a piggy bank- and not just one piggy bank. Rich Dad recommended that I have three piggy banks, each one for specific purpose.” I know, I know, keeping a piggy bank sounds like a very childish thing to do. The author disagrees. In fact, he calls keeping a piggy bank ”sophisticated.” He also says that when I keep a piggy bank, I'll be able to see how my money grows. The three piggy banks previously mentioned represent three different directions that the money floes in. The first piggy bank represents charity. One of the definite benefits of being rich is how much I can give to help. Buying for myself isn't something I do often, nor do I have a need, seeing as my parents provide everything. What better way to spend the money I get than on others? The author describes it as,” Buying things for yourself is great, but giving money to others is the best feeling in the world.” If I wanted to make a charitable contribution, though, I need to do that through a check; it's the safest way to transport my money and it's a good record of my contribution. Charitable contributions also take money off of my taxes. The second piggy bank represents savings. Most people assume that all leftover money should be put in the second piggy bank. That isn't a good way to get rich. A bonus of having a savings account is that most pay you interest each month. While that sounds all well and good, the interest actually doesn't add up to much. Rich Dad said,”Savers are losers.” Basically, it sounds like an easily misunderstood way of saying that saving has its limits. After all, the money isn't getting me rich if it's just sitting in a bank somewhere. Instead, I should put some money in a savings account, but not all of the leftovers. The third piggy bank represents investments, risk, learning, and buying and building assets. That is the piggy bank that Rich Dad told the author to focus on. It helped develop the author's financial intelligence. “Money without financial intelligence is money soon gone.” However, there is more to the formula of getting rich than just keeping three piggy banks. The second part of the formula is keeping my money moving. Investments, assets, whatever it takes. Because when my money is moving, it makes more money, and the goal here is to get rich, right? One important thing I need to do, though, is as soon as I've earned some money, the first place I'm going to put my money is back into that piggy bank. In other words, I need to pay myself first. The piggy bank principle is important to know; in fact, the author still keeps three piggy banks. If the rich still do it, why not me?
When I hear,”debt” I pair it with,”bad.” Ironically, that is not always the case. In fact, Rich dad was trying to get into debt. Apparently, there are two kinds of debt: good debt and bad debt. (Who knew that,”good” would ever be an adjective for debt?) While having a credit card can be good, it can also be a bad debt. The author describes having a credit card as having a blank check-until the bill comes in. If I don't pay off my credit card bill, then the percentage is added to the next month's bill, even if I don't buy anything. However, if I use a credit card wisely, I'll have an excellent opportunity to establish good credit ratings. Credit cards can also help me be conscious of where my money goes and how often. Get into good debt, and you'll keep getting richer. Bad debt speaks for itself.

You can read:-Self-management,
                 setting SMART goals